Mason Hawkins

Mason Hawkins

Last Update: 03-10-2016

Number of Stocks: 28
Number of New Stocks: 0

Total Value: $11,046 Mil
Q/Q Turnover: 7%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Mason Hawkins Watch

  • Longleaf Partners' Semiannual Investor Webcast Transcript



  • Mason Hawkins Reduces Portfolio in 3 Holdings

    Legendary investment guru Mason Hawkins sold 51,700,581 shares from his portfolio in Triangle Petroleum Corp. (TPLM), Level 3 Communications Inc. (NYSE:LVLT) and Loews Corp. (NYSE:L).


    Hawkins is primarily a value investor similar to Benjamin Graham and Philip A. Fisher. These legendary gurus looked for businesses with good management, good people and companies that sold for discounts significantly lower than their intrinsic values.

      


  • Mason Hawkins Buys Stakes in du Pont, Tribune Media in 3rd Quarter

    Value investor Mason Hawkins (Trades, Portfolio), chairman and CEO of Southeastern Asset Management, says he looks for “good business, good people and a good price” when looking for investment opportunities. Using those criteria, he found several options in the third quarter.


    Hawkins’ most noteworthy third-quarter transaction was his purchase of a 7,810,399-share stake in E.I. du Pont de Nemours & Company (NYSE:DD), a Wilmington, Del.-based chemical company, for an average price of $53.37 per share. The deal had a 3.18% impact on Hawkins’ portfolio.

      


  • Mason Hawkins' Fund Takes 10% Stake in Actuant Corp.

    Mason Hawkins (Trades, Portfolio) has announced a 6,206,894-share stake in Actuant Corp. (NYSE:ATU), taking over 10.4% of the small-cap company that has a business predictability rating from GuruFocus of one star and a P/E ratio near a 10-year high.


      


  • Investor Day Details Key Initiatives for McDonald’s

    On Tuesday, Nov. 10, McDonald’s (NYSE:MCD) held its Investor Day with a number of significant announcements and initiatives influencing the stock’s price. Already performing strongly among its peers the company’s turnaround plan, discussed in detail on Nov. 11, has the company set up for even further gains over the long term.


    Year to date McDonald’s has gained 20.83%, substantially outperforming its closest competitors Wendy’s (NASDAQ:WEN) and Restaurant Brands International (NYSE:QSR). For the year, Wendy’s is up 5.98% while Restaurant Brands International is down 8.60%.

      


  • Tom Gayner's Holdings Trading Below the Peter Lynch Value

    Tom Gayner (Trades, Portfolio) is the executive vice president and chief investment officer of Markel Corp. (NYSE:MKL) and president of Markel Gayner Asset Management Inc., Markel's investment subsidiary since December 1990. From the114 stocks in his portfolio, the following are the holdings that are trading with a wider margin of safety, according to the Peter Lynch Value.


    Graham Holdings Co. (GHC) is trading at $575, and the Peter Lynch value gives the stock a fair price of $1,676.4, giving the stock a margin of safety of 66%.

      


  • Longleaf Partners Comments on Cable ONE

    We sold several of the Fund’s investments in the quarter, including our position in Cable ONE (NYSE:CABO) after Graham Holdings spun it out at the beginning of the quarter. The stock sold for our estimate of fair value. We applaud Graham Holdings’ CEO Don Graham for his ongoing efforts to build and recognize value for shareholders.


    From Longleaf Partners' third quarter 2015 commentary.

      


  • Longleaf Partners Comments on Tribune Media

    We purchased Tribune Media (NYSE:TRCO) and one other holding during the quarter. We previously invested profitably in Tribune via its distressed bonds when the company went through bankruptcy. After completing the spin-off of its publishing business last year, Tribune is now a diverse mix of television and digital properties spanning news, entertainment, and sports. The company owns or operates 42 broadcast stations, representing the country’s largest combined independent station group. Additionally, Tribune’s spectrum ownership is uniquely valuable given its concentration in large, coastal cities. Management’s capital allocation discipline has beendemonstrated by repurchasing undervalued shares and selling off non-core assets at compelling prices.


    From Longleaf Partners' third quarter 2015 commentary.

      


  • Longleaf Partners Comments on Level 3 Communications

    Fiber and networking company Level 3 Communications (NYSE:LVLT) declined 17% as concerns about near term top-line growth rates outweighed improvement in margins and free cash flow (FCF) generation. During the quarter, the company reported organic revenue growth across North America and EMEA (Europe, Middle East, and Africa) in-line with expectations, while Latin America, which represents approximately 10% of consolidated revenue, had weaker growth mainly due to currency. The integration of tw telecom remains on track with synergy realizations ahead of schedule. Level 3 already has achieved approximately $115 million of annualized run-rate EBITDA synergies and the company should achieve 70% or $140 million of its annualized synergy target by the end of the first quarter of 2016. FCF growth at Level 3 is ramping up and, we believe, marching toward explosive FCF growth on a per share basis in the next few years as a result of the business’ strong incremental margins, the aforementioned tw telecom synergies, and continued debt reduction and refinancing. During the quarter, major bond rating agencies upgraded approximately $11 billion of the company’s rated debt and credit commitments, further proof of Level 3’s improving business and financial profile.


    From Longleaf Partners' third quarter 2015 commentary.

      


  • Longleaf Partners Comments on Wynn Resorts

    Wynn Resorts (NASDAQ:WYNN), the luxury gaming and hotel company with properties in the United States and Macau, was also down in the third quarter, by 46%. Wynn Palace-Cotai is expected to open in March, and the company commenced site remediation for Wynn Everett-Boston, yet the stock price reflects no value for these assets before they generate revenues. While gross gaming revenue continues to decline in Macau, bears are extrapolating poor results forward and ignoring the potential for Wynn to gain market share next year upon the opening of Palace. The company sells for roughly our appraisal of its Las Vegas properties plus its Boston concession, after net debt. The stock price implies almost no value for Macau, even though the depressed market value of its 72% stake in Wynn Macau (down YTD from HKD 21.85 to HKD 8.78) is worth around $50 per Wynn share. Even bear case analysts project higher visitors and revenues in Macau over the next five years, but the uncertainty of the next 12 months translates into minimal value for Wynn’s Macau properties today.


    From Longleaf Partners' third quarter 2015 commentary.

      


  • Longleaf Partners Comments on DreamWorks Animation

    Film studio DreamWorks Animation (NASDAQ:DWA) was down 34% in the quarter. A change in accounting for DreamPlace sales, currency impacts, and slower-than-expected merchandise licensing agreements cut in half revenue guidance for its developing Consumer Products division. We believe merchandise licensing will gain traction over time and deliver more recurring revenues, offering significant upside to our DreamWorks appraisal. DreamWorks’ other core businesses performed well. The strong results of the feature film Home highlights the company’s creative talent in generating engaging content that will build the film library. In addition, newer growth initiatives in the Television segment continued to ramp strongly, and the New Media segment, which contains AwesomenessTV, doubled revenues with strong gross margins.


    From Longleaf Partners' third quarter 2015 commentary.

      


  • Longleaf Partners Comments on CONSOL Energy

    One of the noted energy holdings, CONSOL Energy (NYSE:CNX), the Fund’s largest performance detractor, fell 55% in the quarter after disappointing revenue and earnings on weaker-than-expected thermal coal production and negative natural gas differentials versus the New York Mercantile Exchange. Management is adjusting to lower commodity prices with cost controls and took steps to recognize the value of CONSOL’s coal assets by offering shares in the MLP CNX Coal, which generated $200 million in proceeds. We filed a 13-D during the quarter to discuss with third parties as well as management and the board a potential monetization or separation of the valuable Marcellus and Utica gas assets. We believe these assets alone are worth demonstrably more than CONSOL’s total equity capitalization. They are unique, low cost reserves given the company’s fee ownership of many acres. CONSOL is exploring monetization paths for all of its assets, including thermal coal, metallurgical coal, pipelines, and the Baltimore port terminal.


    From Longleaf Partners' third quarter 2015 commentary.

      


  • Longleaf Partners Comments on HollyFrontier

    HollyFrontier (NYSE:HFC), the independent petroleum refiner that owns and operates five refineries throughout the Mid-Continent, Southwest and Rocky Mountain regions, rose 14% in the quarter prior to our selling the stock as it approached our appraisal. As a refiner, HollyFrontier benefitted from lower feedstock cost and more miles driven from increased demand for gasoline. CEO Mike Jennings bought in undervalued shares and focused on projects with master limited partnership (MLP) potential amidst the market’s thirst for yield. This strategy helped the stock price rise to intrinsic value, as HollyFrontier appreciated 55% over our short holding period.


    From Longleaf Partners' third quarter 2015 commentary.

      


  • Longleaf Partners Comments on ViaSat

    Integrated satellite company ViaSat (NASDAQ:VSAT) was the largest positive contributor in the quarter, up 7%. While the company had a slight decline in Exede broadband subscribers, averagerevenue per user (ARPU) was up 7% year-over-year and churn was also down. ViaSat captured good margin performance at its government and satellite services segments. The government segment posted its best growth performance in two years, along with a healthy order book and a 22% increase in backlog. ViaSat still plans the launch of its next generation ViaSat-2 satellite in 2016, which will further improve the company’s ability to deliver superior broadband technology across a larger customer base.


    From Longleaf Partners' third quarter 2015 commentary.

      


  • Longleaf Partners Small-Cap Fund Commentary 3Q 2015

    Sharp energy price declines resulted in our energy holdings becoming further depressed. Oil prices fell more than 50% over the last year—something that has happened less than 2% of the time in the last 115 years.1 China macro fears impacted companies with Asian exposure. The media industry broadly declined after several large businesses reported declining U.S. ad revenues in August, sparking fears over the long-term health of the television business. Stock price declines were not reflective of changes to underlying business appraisals. We continue to see a high level of value-additive corporate activity across the entire portfolio, at both top contributors and those businesses that declined the most in the quarter.

      


  • The Stocks in Mason Hawkins' 'Crash Bucket'

    In Southeastern Asset Management’s third quarter letter, managers discussed three categories of their holdings, the third of which they dubbed a “crash bucket.” Stocks in this elite group consisted of their energy holdings, which as a group had declined more than 60% year to date.


    Managers viewed the “crash bucket” in a positive light, saying companies' recovery would eventually bestow “a large part of our significant potential future return.” But all of the stocks save one, Wynn (NASDAQ:WYNN), fell into the energy category, whose price revival depends largely on a recovery of oil prices. Southeastern, where investor Mason Hawkins is chairman and CEO, disagreed that the stocks depended on an upswing in oil, however.

      


  • Southeastern Asset Management Comments on National Oilwell Varco

    We also initiated a position via options in National Oilwell Varco (NYSE:NOV), the leading global provider of equipment used in offshore and land drilling. Fear of a prolonged downturn in deep water rig orders is more than accounted for in the current price and is giving us an opportunity to invest in a high-quality franchise during a cyclical trough. The company holds a dominant market position due to its scale, trusted brands, and large installed base of equipment. Shareholders are benefitting from a 5% dividend yield while waiting for the rig building cycle to resume. Additionally, CEO Clay Williams is a strong capital allocator who we believe should continue to build value through share repurchases and acquisitions of distressed companies.

    From Mason Hawkins (Trades, Portfolio)' Longleaf Partners third quarter 2015 shareholder commentary.  


  • Southeastern Asset Management Comments on Level 3 Communications

    Fiber and networking company Level 3 Communications (NYSE:LVLT) declined 17% as concerns about near term top-line growth rates outweighed improvement in margins and free cash flow (FCF) generation. During the quarter, the company reported organic revenue growth across North America and EMEA (Europe, Middle East, and Africa) in line with expectations, while Latin America, which represents approximately 10% of consolidated revenue, had weaker growth mainly due to currency. The integration of tw telecom remains on track with synergy realizations ahead of schedule. Level 3 already has achieved approximately $115 million of annualized run-rate EBITDA synergies, and the company should achieve 70% or $140 million of its annualized synergy target by the end of the first quarter of 2016. FCF growth at Level 3 is ramping up and, we believe, marching toward explosive FCF growth on a per share basis in the next few years as a result of the business’ strong incremental margins, the aforementioned tw telecom synergies, and continued debt reduction and refinancing. During the quarter, major bond rating agencies upgraded approximately $11 billion of the company’s rated debt and credit commitments, further proof of Level 3’s improving business and financial profile.

    From Mason Hawkins (Trades, Portfolio)' Longleaf Partners third quarter 2015 shareholder commentary.  


  • Southeastern Asset Management Comments on Chesapeake Energy

    One of the largest producers of natural gas, natural gas liquids, and oil in the U.S., Chesapeake Energy (NYSE:CHK) declined 34% in the quarter. In line with our exposure, about 60% of the impact came from the options we own and the remainder from the common equity. Concerns remain over the company’s liquidity profile, but management made major strides to improve realizations by successfully renegotiating two contracts with pipeline operator Williams that reduces transportation costs. Additionally, on October 1 the company announced the renewal of its $4 billion credit facility. Comparable asset sales in overlapping basins, such as Encana’s sale of Haynesville assets, further confirmed our appraisal of Chesapeake. The company’s shares remain more heavily discounted than its peers, yet CEO Doug Lawler is keenly focused on realizing value for shareholders even in this depressed energy price environment. Further reducing costs, including the recently announced 15% headcount reduction, coupled with asset divestitures, should lead to a stock price more in line with intrinsic value, which we appraise at twice the current price assuming the underlying commodity prices remain depressed.

    From Mason Hawkins (Trades, Portfolio)' Longleaf Partners third quarter 2015 shareholder commentary.  


  • Southeastern Asset Management Comments on CONSOL Energy

    CONSOL Energy (NYSE:CNX) fell 55% in the quarter after disappointing revenue and earnings on weaker-than-expected thermal coal production and negative natural gas differentials versus the New York Mercantile Exchange. Management is adjusting to lower commodity prices with cost controls and took steps to recognize the value of CONSOL’s coal assets by offering shares in the master limited partnership (MLP) CNX Coal, which generated $200 million in proceeds. We filed a 13-D during the quarter to discuss with third parties as well as management and the board a potential monetization or separation of the valuable Marcellus and Utica gas assets. We believe these assets alone are worth demonstrably more than CONSOL’s total equity capitalization. They are unique, low cost reserves given the company’s fee ownership of many acres. CONSOL is exploring monetization paths for all of its assets, including thermal coal, metallurgical coal, pipelines, and the Baltimore port terminal.

    From Mason Hawkins (Trades, Portfolio)' Longleaf Partners third quarter 2015 shareholder commentary.  


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